TD Ameritrade 2018 Annual Report

49 Contractual Obligations The following table summarizes our contractual obligations as of September 30, 2018 (dollars in millions): Total Payments Due by Period (Fiscal Years): Less than 1 year 1-3 years 3-5 years More than 5 years Contractual Obligations 2019 2020-21 2022-23 After 2023 Long-term debt obligations (1) . . . . . . . . $ 3,000 $ 95 $ 648 $ 846 $ 1,411 Securities sold under agreements to repurchase . . . . . . . . . . . . . . . . . . . . . 96 96 — — — Operating lease obligations . . . . . . . . . 345 75 109 62 99 Purchase obligations (2) . . . . . . . . . . . . . 371 206 80 48 37 Employee severance and involuntary termination costs (3) . . . . . . . . . . . . . . 21 20 1 — — Income taxes payable (4) . . . . . . . . . . . . 218 218 — — — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,051 $ 710 $ 838 $ 956 $ 1,547 (1) Represents scheduled principal payments, estimated interest payments and commitment fees pursuant to the Senior Notes, the interest rate swaps and the revolving credit facilities. Actual amounts of interest may vary depending on changes in variable interest rates associated with the interest rate swaps. (2) Purchase obligations primarily relate to agreements for goods and services such as professional services, property and equipment, software, telecommunications, market information, advertising and marketing. Purchase obligations also includes obligations for contracts assumed in the acquisition of Scottrade. We are consolidating certain functions as a result of the acquisition, which may result in the acceleration of future obligations into fiscal year 2019. (3) Primarily consists of exit and involuntary termination costs incurred in connection with the consolidation of certain functions and facilities following the Scottrade acquisition. (4) Asignificant portion of our income taxes payable as of September 30, 2018 consists of liabilities for uncertain tax positions and related interest and penalties. The timing of payments, if any, on liabilities for uncertain tax positions cannot be predicted with reasonable accuracy. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk generally represents the risk of loss that may result from the potential change in the value of a financial instrument as a result of fluctuations in interest rates and market prices. We have established policies, procedures and internal processes governing our management of market risks in the normal course of our business operations. Market-related Credit Risk Two primary sources of credit risk inherent in our business are (1) client credit risk related to margin lending and leverage and (2) counterparty credit risk related to securities lending and borrowing. We manage client margin lending and leverage risk by requiring clients to maintain margin collateral in compliance with regulatory and internal guidelines. The risks associated with margin lending and leverage increase during periods of rapid market movements, or in cases where leverage or collateral is concentrated and market movements occur. We monitor required margin levels daily and, pursuant to such guidelines, require our clients to deposit additional collateral, or to reduce positions, when necessary. We continuously monitor client accounts to detect excessive concentration, large orders or positions, patterns of day trading and other activities that may indicate increased risk to us. We manage risks associated with our securities lending and borrowing activities by requiring credit approvals for counterparties, by monitoring the market value of securities loaned and collateral values for securities borrowed on a daily basis and requiring additional cash as collateral for securities loaned or return of collateral for securities borrowed when necessary, and by participating in a risk-sharing program offered through the Options Clearing Corporation.